Key Takeaways
- LME zinc stocks have fallen to ~78,000 tonnes the lowest since 2007.
- Mine closures in Europe and Australia have removed ~1.5 million tonnes of annual supply.
- Teck Resources’ Red Dog mine is the primary TSX large-cap zinc exposure.
- Commodity desks see zinc testing US$3,200/t by mid-2027 if the deficit holds.
Zinc rarely gets the headlines that copper or nickel attract, but the numbers behind the market tell a compelling story. LME zinc warehouse stocks have fallen to approximately 78,000 tonnes the lowest level since 2007 while exchange-registered inventory covering on-warrant metal stands below 50,000 tonnes. At current consumption rates, visible inventories represent less than two days of global demand.
Mine Supply Is the Core Problem
The zinc supply crunch has been building since 2023, driven by a cascade of mine closures and suspensions. Nyrstar’s Budel smelter in the Netherlands one of Europe’s largest ran at reduced capacity through 2025 due to high energy costs. Australia’s Century Mine, once a top-five global zinc producer, finished processing its tailings in 2024, removing approximately 500,000 tonnes per year of future feed. Vedanta’s Rampura Agucha mine in India the world’s single largest zinc mine experienced grade-related production shortfalls in H1 2026.
Combined, these factors have removed an estimated 1.5 million tonnes of annualised zinc production from the global supply chain since 2022. New mine development is limited: the major undeveloped zinc deposits (Aripuanã in Brazil, Bornite in Alaska, Kipushi in the DRC) are either in early production ramp-up or still in feasibility.
Canadian Zinc Exposure
For TSX investors, the primary large-cap zinc exposure is through Teck Resources (TECK.B), whose Red Dog mine in Alaska is the world’s largest zinc-lead mine and contributes meaningfully to annual earnings. At current zinc prices of approximately US$2,841/t (US$1.29/lb), Red Dog’s margins remain robust cash costs are approximately US$0.55/lb zinc equivalent.
On the development side, Foran Mining (TSX-V: FOM) is advancing the McIlvenna Bay VMS deposit in Saskatchewan, which has a zinc-copper-gold profile. Construction is progressing and first production is targeted for 2027. The project’s polymetallic nature provides natural revenue diversification.
Price Outlook
Consensus among commodity desks points to zinc testing US$3,200/t (US$1.45/lb) by mid-2027 if the deficit trajectory holds. BMO Capital Markets has the highest near-term target at US$3,500/t. The key risk to the upside scenario is a demand slowdown in China’s construction sector, which consumes approximately 60% of global zinc through galvanised steel applications.